Bank bashing the hot new game
Tuesday, July 21st 2009, 9:25PM
Should there or shouldn’t there be an enquiry into bank interest rates and their margins?
It’s the hot new question and a great lightening rod for passionate debate.
The left-leaning parties in Parliament have announced they will hold an “unofficial” enquiry into banks and the rates they charge, however those on the right are suddenly totally opposed to the idea.
Normally one would come to a conclusion that this “unofficial” enquiry is just a political stunt. Certainly some commentators are taking that view.
While it may be a stunt, it’s worth noting the positioning of key stakeholders.
First up the government seemed vaguely interested in such an enquiry. Then it put the kybosh on it big time. Some reports say Finance Minister Bill English told his people on the Finance and Expenditure Select Committee any enquiry wasn’t going to happen and they were to opposed it – which is what they did.
However, some of the government’s key supporters such as Federated Farmers seem pretty keen on the idea.
Likewise, the big-Australian owned banks have sat on the fence. None have said they won’t take part. (No doubt they aren’t that keen on the idea, but that’s another story).
And it seems the Reserve Bank governor Alan Bollard is mildly receptive. In the central bank’s report on bank margins it suggests short-term rates were too high and it seemed to indicate it was happy with some sort of examination.
I always felt it was putting some pressure on the government. Apparently Bollard has been invited to this “unofficial” enquiry, but he needs English’s permission to take part.
Perhaps this is clever politics and forcing English to say no.
No doubt the public will support the idea of an enquiry too.
This all leads to the observation while an enquiry may not amount to much, the government is well and truly on the wrong side of the argument.
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